Your Landlord Lost Your Building to Foreclosure - Now What Do You Do?

Your building has been foreclosed upon, but you are only renting a unit there. What do you do? There are five important steps you should take to make sure you are not adversely affected by the bank taking over the building.

The first thing you need to do is not panic. There are federal regulations which state that tenants cannot be thrown out because the property has been foreclosed. The bank must provide notice to you that they have taken control of the property. If you have a written lease, the bank must continue the lease for the term of the lease. You simply need to keep paying rent. If you have a verbal lease, or monthly lease, the new owners must allow you a reasonable time to find a new residence and move. So, if you believe your landlord may be facing foreclosure or is in financial trouble, you do have some relief.

If you think your landlord is in foreclosure you should start making phone calls. If you pay utilities as part of the rent, call the utility companies and verify the account is current. Explain the situation and that you believe there may be a problem if they ask. If you are told that the account is past due, find out if there is a shutoff notice. If there is a possibility of shut off, find out if there is anything you can do to help avoid the shut off. You may be able to take over the account if the landlord has lost the property.

Another thing you should do if you believe your landlord is in foreclosure is to check with a legal advocacy group or legal-aid unit in your area. Make sure you know and understand everything about the legal aspect of this issue. Find out what your landlord must do, what the bank or new owner must do, and what they cannot do. This varies by state and sometimes depends on the amount of property the landlord owned.

The fourth thing you should do if you think your landlord is in foreclosure is, unfortunately, start a plan to find a new residence. While you do have options, and there are protections in most cases, the inevitable fact is that you will be moving. Don't panic and start looking at everything in the paper. Use the time to look for something that you like, can afford, and feel comfortable with.

The fifth and final thing you should do is be aware of what you can do from today forward. The options include finding a better place and a more cost effective place. You can also look into the possibility of renting to own the property if you are in a single residence.

Sources:
NOLO
Tenants Together